Abbott won't rule debt levy in or out

PM Tony Abbott has refused to comment on reports his government may soon introduce a debt levy. Source: AAP

PRIME Minister Tony Abbott has refused to comment on reports his government may soon introduce a debt levy to tackle the budget deficit.

Based on the Queensland flood levy, News Corporation says a "one off" tax will be introduced in Treasurer Joe Hockey's May budget.

The levy would be targeted at high income earners, with the tax thresholds yet to be decided by the government.

The government's commission of audit has also recommended scrapping Family Tax Benefit B payments aimed at single income families, News Corporation said.

Mr Abbott said he was not going to get into the business of ruling things in and ruling things out of the May 13 budget, but the coalition had committed to fixing the "fiscal disaster" left by the Labor government.

Australia had debt and deficits "stretching out as far as the eye can see", he told reporters in Brisbane.

"It's important that the mess be tackled," the prime minister said on Sunday.

"Now we are going to do it in ways which are faithful to the commitments that we made to the Australian people.

"We will do it in ways which are fair, which are equitable, and which I believe will be seen to be fair by the Australian people."

Labor says the levy would breach Mr Abbott's pre-election commitment not to impose new taxes.

"Make no mistake, this will be the biggest broken promise of all," shadow treasurer Chris Bowen told reporters in Sydney.

"Tony Abbott told the Australian people he would cut taxes and he specifically said he would introduce no new taxes."

Mr Bowen accused Mr Hockey of creating a "conflated budget emergency".

"But that doesn't justify a tax on Australian families who would pay the cost for this breach of promise from Tony Abbott," he said.

But Mr Abbott said the government would keep its election commitments.

"A very important commitment was to get the budget back on track to a sustainable surplus, but we will do that in ways which keep faith with our commitments to the Australian people in the election campaign," he said.

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